Give gig workers more control and commit to good work, argues RSA

Think tank recommends changing the law on employment rights to empower gig workers

Government and industry commitment to good work in the gig economy required

Largest ever gig economy survey finds 8 million people interested in gig working

Gig workers should be given more power to hold companies to account under the law as a first step to making the gig economy fit for the future, according to a new report and survey published today by the RSA.

Good Gigs: A fairer future for the UK’s gig economy recommends the burden of proof be shifted to companies to prove gig workers are not employees, and that penalties should be strengthened against companies who use clauses that prohibit employment status litigation.

Tribunal fees for workers challenging their employment status should be scrapped, and tribunal rules should be modified to allow for a fast-track summary process to give workers immediate clarity, the RSA argues.

But legal changes on employment status alone are insufficient to transform workers’ experiences in the gig economy, argues the report. Without other wider reform, the combination of technological change and market power could harm gig workers’ well-being over the long-term.

The report therefore recommends that government take a new approach to regulating the gig economy. Under ‘shared regulation’, government, gig economy companies, and workers should collaborate to create a Charter for Good Work in the Gig Economy, setting out how the sector can support career development and professional fulfilment.

Today’s report, supported by online payment solution firm MANGOPAY, also recommends addressing issues of capital, culture and market distortions through greater investment in ‘Worker Tech’ and sustainable business models. It also calls for an inquiry into whether market competition across the whole economy is robust and serving the interests of customers, suppliers, shareholders and taxpayers.

As part of the project, the RSA undertook the largest ever survey on Britain’s gig economy, which reveals that:

There are currently 1.1 million people working in Britain’s gig economy, making it almost as big as NHS England.

Almost one in five of the working age population – or 8 million people - would consider some form of gig work in the future

Young people are particularly attracted to gig work. A third of the gig economy workforce is aged between 16 and 30, compared to 11% of other self-employed workers and a quarter of employees. A quarter of all 16 – 30 year olds are considering gig work in the future.

The report’s lead author, RSA Senior Researcher Brhmie Balaram, said

"Our survey – the biggest ever of its type – shows the potential for the gig economy to grow at great speed over the coming years. In the short term, this means we must tackle the debate about the employment status of gig workers and clarify the law.

But to truly transform gig workers’ experiences of the labour market, we need an approach that goes way beyond legal housekeeping. That’s why we are urging government and the gig economy industry to collaborate and create a good work charter which sets out how gig workers can have fulfilling working lives.”

Commenting on the report, Céline Lazorthes, founder and CEO of MANGOPAY, said

“I am delighted MANGOPAY has supported the largest survey on the gig economy ever conducted in the UK, which provides solid data and much-needed insight into this expanding and highly topical field.

The rapid growth of the gig economy raises the question of our changing relationship with work. It is a system that creates non-traditional dynamics between employers and employees. Over the coming years, we will require innovation to enable and facilitate this new working style.

Traditional institutions, such as insurance companies and banks, must respond to the increasing need for flexibility of process. The market must adapt and design solutions that create a positive impact for those working in the gig economy today.”

1. Account for the pressing questions about employment status and concerns that misclassification may be eroding public finances as well as workers’ protections.

2. Begin building a new foundation of social and economic security that isn’t premised on traditional employment, but is based on good work for all.

3. Address systemic issues in the labour market, such as a lack of support for atypical workers and promising new business models.

To resolve issues of employment status, government should seek to clarify the law for both workers and businesses, as well as deter misclassification by giving workers more power to hold businesses to account under the law.

To provide more clarity, government should:

Publish an official guide to aid workers and businesses in identifying different employment rights and related tax obligations.

Specify that employment intermediaries can offer training and development opportunities, and to any category of worker.

Consult with the public on any proposed changes to tax law, trialing deliberative methods.

To enable greater accountability to workers under the law:

Strengthen penalties against companies using clauses in contracts that prohibit litigation over employment status. Moreover, give explicit protection to workers who litigate the matter.

Introduce a summary process for workers wishing to challenge employment status at a tribunal.

Reverse the burden of proof, so that the onus is on companies to prove that their workers are not ‘workers’ or employees.

In response to the changing labour market, government must steer innovation with workers in mind, setting out its vision for good work in collaboration with business and civil society.

There is also a need to develop the wider infrastructure of the gig economy to better support workers, irrespective of their employment status, and to harness the potential of platforms through fostering a new generation of business models.

Government, businesses, and civil society should pursue the following:

1. Government should collaborate with platforms, civil society, and workers on a ‘Charter for Good Work in the Gig Economy’ to advance a vision of what good work is in the sector.

2. Government should invest in a dedicated service for gig workers, offering general advice and counsel about employment rights, or information and guidance on filing taxes for example.

3. Government should expand the UK’s Financial Capability Strategy to include gig workers, strengthening financial savvy and security in a growing proportion of the workforce.

4. SEUK, on behalf of platforms, and a civil society organisation should establish ‘Independent Peer Review Hearings’ to ensure that gig workers have a fair appeals process and an opportunity to build community.

5. SEUK should work with platforms and relevant institutions to enhance training and development opportunities for gig workers, considering what progression would look like in the sector and creating a strategy to enable it.

6. Government should seed and support promising technology in the gig economy by ringfencing a proportion of its new R&D fund and introducing a ‘regulatory sandbox’ for experimentation with blockchain technology, WorkerTech, and other technology that could better the labour market in general.

7. Government and Co-ops UK should help nurture platform co-ops that explicitly embed a social purpose into their mission, and government should support their growth by creating a fund to provide long-term equity investment.

8. Government should modernise the Competition Act in the UK in light of Brexit, widening the remit to take into account the protection of workers’ interests alongside consumers’ interests.

About the RSA

The RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) believes that everyone should have the freedom and power to turn their ideas into reality – we call this the Power to Create. Through our ideas, research and 28,000-strong Fellowship, we seek to realise a society where creative power is distributed, where concentrations of power are confronted, and where creative values are nurtured.

About MANGOPAY

MANGOPAY is an online payment technology designed for marketplaces, crowdfunding platforms and sharing economy businesses.

Built by an entrepreneur for entrepreneurs, MANGOPAY takes away the pain of back system payments for growing businesses by embedding white-label technology tailored to each customer that can accept multi-currency payments and pay out automatically worldwide.

The MANGOPAY technology seamlessly creates individual e-wallets for buyers and sellers, where funds can be held securely for as long as needed.

The end-to-end payment solution is unique in the market due to MANGOPAY’s E-Money Issuer license, which enables businesses to accept payments, hold the funds in escrow and pay out with ease, speed and efficiency.